The complex bit (repayments)

Off to uni in September and applying for Student Finance, but not sure what will happen once it comes time to repay your loan? It may seem a long way off, but itâs handy to know. We talk you through what youâll need to pay and when.

Time to pay back

You only have to payÂ back your Tuition Fee and Maintenance Loans, but not other financial help like grants and bursaries. You will still have to repay your student loan even if you leave your course early, but the earliest you start repaying is when your annual income is over Â£21,000.

You pay back 9% of your income over the minimum amount of Â£21,000. Below shows what this would look like:

Student loan repaymentsÂ

Your income per year

Monthly repayments

Â£21,000 and under

Â£0

Â£25,000

Â£30

Â£30,000

Â£67

Â£50,000

Â£217

Interest is a set amount you pay for borrowing your Student loan.Â Interest starts being added to your loan from when you get your first payment at the start of your course. While youâre studying, interest is inflation (which means the rate of increase) plus 3%.

Student loan interest Â

Income

Interest rate

Â£21,000 or less

Inflation

Â£21,000 to Â£41,000

Inflation plus up to 3%

Over Â£41,000

Inflation plus 3%

What if I canât find a job after uni?

The idea is that you only pay when you can afford to. So you donât make repayments if you canât find a job, lose your job or if youâre earning less than Â£21,000 a year.

Some good and bad things aboutÂ student loan debt:

It wonât make it harder to borrow more in the future â it doesnât affect yourÂ credit rating.

It wonât be a hassle to pay â it comes out of your salary before you see it.

You wonât ever be faced with a lump sum to pay.

You wonât have to pay it back when youâre unemployed or not earning much.

Butâ¦

It will mean that your monthly repayments go up as you earn more.

You will have interest added to the total debt each month.

You willÂ probably have to pay your loan back even if you drop out of your course.

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